Uganda is earning big from coffee exports
World coffee exports for October totaled 9.68 million bags down by 4.4% from 10.13 million bags in October 2020, the November 2021 report by Uganda Coffee Development Authority (UCDA) has revealed.
It adds that total exports for Coffee year 2020/21 totaled 128.93 million bags an increase of 1.2% compared to 127.36 million bags for coffee year 2019/20.
“The ICO Composite Indicator price increased by 7.5% to 195.17 US cents up from 181.57 US cents in October 2021, the highest in ten years. The prices have seen a positive trend since October 2020,” the report reads in part.
It adds that concerns of supply shortage due to adverse weather conditions in Brazil and supply disruption caused by shortage of containers in Vietnam continue to push prices higher.
Quoting the ICO November 2021 report, UCDA says: “Global coffee production for 2020/21 coffee year is estimated to increase by 0.4% to 169.64 million bags a 0.4% up from 169.00 million bags in Coffee Year 2019/20. Global consumption is estimated to increase by 1.9% % to 167.67 million bags in 2020/21 coffee year compared to 164.53 million bags in 2019/20 coffee year.”
Uganda Coffee Exports In November
According to UCDA, Uganda’s coffee exports in November 2021 amounted to 524,902 60-kilo bags worth US$ 71.09 million (Shs252.9bn).
This comprised 436,417 bags of Robusta valued at US $51.42 million and 88,485 bags of Arabica valued at US$ 19.67 million.
This was an increase of 21.98% and 65.90% in quantity and value respectively compared to the same month last year.
By comparing quantity of coffee exported by type in the same month of last Coffee Year (November 2020), Robusta increased by 17.15% and 68.17% in quantity and value respectively, while Arabica exports increased by 53.11% and 60.24% in quantity and value respectively.
UCDA says increasing coffee exports during the month compared to the previous year was due to newly planted coffee which started yielding supported by favorable weather.
“The positive trend in global coffee prices were attributed to weather related issues in Brazil and shortage of shipping containers which prompted exporters to release their stocks,” the report says.
It adds that coffee exports for the 12 months (December 2020-November 2021) amounted to 6,648,473 60-kilo bags worth US$ 681.49 million compared to 5,399,837 60-kilo bags valued at US$ 514.37 million the previous year (December 2019- November 2020).
This represents 23.12% and 32.49% increase in both quantity and value respectively
The report reveals that the average export price was US$ 2.26 per kilo, 16 cents higher than US$ 2.10 per kilo realized in October 2021.
It was 60 cents higher than in November 2020 (US $ 1.66/kilo). Robusta exports accounted for 83% of total exports lower than 86% in October 2021. The average Robusta price was US$ 1.96 per kilo, 3 cents higher than the previous month.
“Washed Robusta fetched the highest price of US$ 2.70 per kilo, a premium of 68 cents over conventional Screen 18. It was followed by Organic Screens 18, Arabica fetched an average price of US$ 3.70 per kilo, 40 cents higher than in October 2021. The highest price was for Mt. Elgon AA, AB, and CPB sold at US$ 5.00 per kilo, and were followed by Bugisu A+ sold at US$ 4.91 per kilo,” the report reads, adding: “Drugar was sold at US$ 3.52 per kilo, a discount of 76 cents from Bugisu AA. Drugar exports had a 44% of Arabica exports compared to 61% the previous month. The share of sustainable Arabica exports to total Arabica exports was 17.23%.”
Coffee Exports By destination
Italy maintained the highest market share with 32.76% compared with 26.27% last month, the report says.
It was followed by Germany 17.43% (14.20%), Belgium 8.06% (6.11%) India 6.61% (5.94%) and Algeria 5.56% (14.82%).
It’s important to note that the figures in brackets represent percentage market share held in October 2021.
According to the report, coffee exports to Africa amounted to 83,803 bags, a market share of 16% compared to 106.681 bags (23%) the previous month. African countries included Algeria, Sudan, Morocco, Egypt, South Africa, Somalia, Libya and Kenya.
Europe remained the main destination for Uganda’s coffees with a 69% imports share higher than 57% in October 2021, the report says.
Local Situation
According to UCDA, during the month of November 2021, farm gate prices ranged from Sh.2,500-3,000/= per kilo of Kiboko (Robusta dry cherries); Shs. 5,500-6,000/= for FAQ; Sh. 10,000- 10,500/= for Arabica parchment; and Sh. 9,500-10,000/= per kilo for Drugar from Kasese. Robusta Kiboko averaged UGX 2,750/= per kilo; FAQ UGX 5,750/= per kilo, Arabica parchment UGX 10,250/= per kilo and Drugar UGX 9,750/= per kilo.
The report says the realized coffee export and farmgate prices have not increased as significantly as the global coffee prices reflected especially in the ICO global Robusta prices.
“Whereas the low farm gate prices could be related to the appreciation of the Uganda shilling against the dollar, the export price differential from the terminal market was higher compared to the past. The global Robusta price increased from US$ 1.60 per kilo in November 2020 to US$ 2.41 in November 2021, the corresponding realized export price of Screen 15 (Standard) taken as benchmark for Robusta, was sold at only US$ 1.99 per kilo in November 2021 up from US $ 1.40 in November 2020,” the report explains.
It adds: “This is a discount of 20 cents and 42 cents per kilo in 2020 and 2021 respectively compared to the terminal price. This could be partly attributed to releasing stocks of coffee sold earlier when prices were low. This however, has to be investigated further since it makes Uganda Robusta Coffee less competitive on the global market in spite of the intrinsic quality characteristics.”
Thanks Business Forcus for this informative and inspirational coffee story.
It’s my humble request that you publish a coffee story specifically clarifying on the different coffee types mentioned in the story above ie Kibooko, FAQ, Parchment and Drugar and what one has to do advance to the most paying.
Thanks
Less yields due to weather conditions could be the reason for high coffee prices.
Less yields due weather conditions could be the reason of high coffee prices.